Dubai office space expected to grow 250% in three years

Dubai: Office space in Dubai is expected to grow by 250 per cent within three years to 110 million square feet, a leading property services firm said.

At present the city has 32 million square feet of office space and almost all of it is occupied, resulting in high rents as growing working population puts more pressure on the available properties.

"Unprecedented amount of ongoing construction activity will create new supply of 80 million square feet between 2008 and 2011," said Nicholas Maclean, managing director of CB Richard Ellis in the Middle East. However, not all buildings under construction meet international office space standards and pressure on prime office locations may continue.

"Only a limited proportion of new supply will meet the needs and requirements of multinational companies," Maclean said.

Shaikh Zayed Road and the Dubai International Financial Centre are the most expensive business locations in the city, followed by Dubai Festival City.

A correction at all rental levels is expected as new supply of offices becomes available.

Dubai faces a shortage of both residential and commercial space.

Based on the number of residence visas issued, the city's population of 1.67 million is growing by 300,000 a year. If this pace continues, the population is projected to grow to 4.1 million by 2015.

If construction delays are "at a minimal," 170,000 new residential units will be available between 2008 and 2010, according to CB Richard Ellis.

The demand for residential units is estimated at 70,000 per year against a delivery of 57,000 units.

Maclean said Dubai's property sector growth is sustainable if economic growth continues and expatriate numbers continue to rise at current levels.

But competition from construction within the region and slow infrastructure growth could undermine the city's property sector, he added.